In the past two months, as gold prices fluctuated and the price drop of gold investment exchange-traded funds (ETFs) widened, individuals have been actively purchasing gold investment ETFs. Individual investors have accumulated nearly 90 billion won in net purchases, betting on a rise in gold prices.
According to the Korea Exchange on the 26th, in the last two months (from October 25 to December 24), individuals net-purchased 79.4 billion won worth of the 'ACE KRX Gold Spot' ETF from Korea Investment Trust Management. They also bought a total of 7 billion won worth of the 'TIGER Gold Futures (H)' (5.7 billion won) from Mirae Asset Global Investments and the 'KODEX Gold Futures (H)' (1.1 billion won) and 'ACE Gold Futures Leverage (Synthetic H)' (250 million won) from Samsung Asset Management.
During this period, gold prices trended downwards, declining 4.04% from 129,100 won to 123,890 won per gram. Although there has been a slight recovery recently, compared to the yearly high of 130,50 won on October 23, the upward trend has clearly reversed. Especially after Donald Trump was elected president of the United States in early November, leading to a sharp rise in the U.S. dollar and Government Bonds yields, gold prices fell to the 110,000 won range.
Afterward, gold prices seemed to rebound, but on the 18th of this month, volatility increased again following the hawkish U.S. Federal Open Market Committee (FOMC) announcement. On that day, the U.S. Federal Reserve (Fed) reversed predictions that it would lower rates four times by a total of 1 percentage point, signaling two rate cuts (0.5 percentage points) in the coming year.
As a result, during the same period, the ACE Gold Futures Leverage (Synthetic H) ETF fell 10.54%, while the ACE KRX Gold Spot (-4.21%), TIGER Gold Futures (H) (-4.86%), and KODEX Gold Futures (H) (-4.82%) also dropped sharply.
However, individuals believe that gold prices will rise further and are actively purchasing gold investment ETFs. The securities industry also evaluated gold investments positively. NH Investment & Securities noted that as long as the U.S. rate-cutting trend does not return to increases, gold prices are expected to remain strong next year, recommending an 'increase in allocation' as an investment opinion.
Hwang Byeong-jin, a researcher at NH Investment & Securities, stated, "Short-term adjustments in gold prices should be viewed as a buying opportunity from a long-term perspective," and added, "As long as there is no reversal of 'tightening' in U.S. monetary policy, gold prices will show a strong cycle."
Typically, a strong dollar tends to lead to a decline in the price of gold, which is considered a safe asset. However, opinions have emerged that next year, the rise in gold prices may continue regardless of a strong dollar.
Global investment bank Goldman Sachs stated, "Due to heightened geopolitical tensions (from the Russia-Ukraine war, Middle East conflicts, etc.) and uncertainties related to the possibility of U.S. tariffs, the allure of gold may increase," predicting that gold prices could rise to $3,000 per ounce by the end of next year. Considering that recent gold prices have been around $2,600 per ounce, this implies a potential increase of at least 11%.